Exam 12: Performance of Contractual Obligations

Chris was indebted to Kirk for a loan of $1,000. Kirk assigned Chris' promise to pay to Bryce. Payment by Chris to Kirk of the $1,000 before notice in writing of the assignment was given to Chris would require Bryce to recover the payment from Kirk, as he could not sue Chris for the money.

An expert landscape architect, known for special skill in designing Japanese gardens, is engaged under contract by a municipality for the creation of a public park with a Japanese theme. The architect becomes unable to fulfill the obligation, but to the satisfaction of the municipality can name a replacement architect who will agree to execute the same work on the same terms. The legal mechanism required to effect this will be an equitable assignment.

Harvey sold a quantity of his hand-carved birdhouses to Keaton's Ltd., stipulating in the contract that they were not be to resold for less than a stated price, so that Keaton's would not cause him to lose business when he sold them direct at craft fairs and shows. Keaton's found they could not sell them, so they resold them to Tom Terrific, a discounter, for the minimum price stipulated in the Harvey-Keaton contract. Tom Terrific then sold them at an even lower price as a loss leader since they had just become very popular. Discuss whether or not Harvey, whose own sales are now slumping, can sue Tom Terrific.

James owed Christie $2,500. She asked him to make the payments to her friend, Amira, and they drew up and signed a contract to that effect. After he had made a couple of payments, Christie died, and James told Amira he would not give her any more money. $2,300 is still outstanding. a. Explain why Amira cannot simply sue James for breach of contract to get the balance of the money. b. Identify the equitable remedy available to Amira, and describe how it would operate to help her here. c. What should Christie have done to make sure that Amira could enforce the contract if Christie was not there to do so?

Kevin was injured when a bottle of pop, purchased by Katie and given to him, exploded in his hand. Kevin cannot sue the manufacturer and receive damages for his injuries because he lacks privity of contract.

Kathy sells her business to Lucy for $40,000 including the stock, the goodwill, and the remainder of the lease. The landlord agrees that Kathy may end her involvement with the leased premises and that Lucy may take over the remainder of the lease on the same terms, and a new lease reflecting this is drawn up and signed by the landlord and Lucy. This new lease is an example of

Chris was indebted to Kirk for a loan of $1,000. Kirk assigned Chris' promise to pay to Bryce. The assignment must be of the entire agreement between Chris and Kirk.

On March 6^th, the Limestone Student Society entered into a contract with the "Stumbling Stones," a rock group, to give a performance at the Limestone U Students' Union on March 31^st. On March 29^th, the "Stumbling Stones" fell ill with the flu, and were unable to travel to Limestone City. Another rock group was contacted by the Stumbling Stones to appear in their place, and arrived at the Students' Union in time to perform. The contract, by its nature, is not subject to assignment.

A student from another class says that assignments were originally common law concepts but are now a statutory process. You disagree with him.

Mr. Richards instructed the contractor who was building his new house to face it with a special synthetic marble made by Messier Ltd. Messier had promised Mr. Richards in writing that the synthetic marble would last longer than the Parthenon and be in better shape. Within three months of its installation, which was properly done, the "marble" was cracking, discolouring, and crumbling at the seams. Mr. Richards can sue Messier successfully although it was not he but the contractor who made the purchase from Messier.

On March 6^th, the Limestone Student Society entered into a contract with the "Stumbling Stones," a rock group, to give a performance at the Limestone U Students' Union on March 31^st. On March 29^th, the "Stumbling Stones" fell ill with the flu, and were unable to travel to Limestone City. Another rock group was contacted by the Stumbling Stones to appear in their place, and arrived at the Students' Union in time to perform. The Limestone Student Society must allow the substitute rock group to perform by virtue of the legal doctrine of vicarious performance.

Chris was indebted to Kirk for a loan of $1,000. Kirk assigned Chris' promise to pay to Bryce. The assignment by Kirk to Bryce must be in writing to be an effective assignment.

Hammond sells her house to Mendoza for $165,000 subject to a mortgage from Imperial Bank for $90,000. Hammond's mortgage had been arranged at a time when interest rates were low, and prevailing interest rates are now much higher. Mendoza would very much like to assume Hammond's obligation to pay under the existing mortgage, rather than arrange a more costly replacement from his own banker. Imperial Bank is indifferent as to who is repaying the debt as Mendoza is just as acceptable a credit risk as was Hammond. Mendoza pays Hammond the $75,000 difference and takes over both the house and her mortgage. This arrangement is an example of

If Martin bought a property from Nevin, knowing (because it was noted on the title deeds) that Nevin had agreed to a restrictive covenant in his contract to purchase the property from Olan, Martin must conform to the restrictive covenant even if it is not included in his contract with Nevin.

Chris was indebted to Kirk for a loan of $1,000. Kirk assigned Chris' promise to pay to Bryce. Notice in writing of the assignment must be given to Chris before Chris is obliged to pay Bryce.

On March 6^th, the Limestone Student Society entered into a contract with the "Stumbling Stones," a rock group, to give a performance at the Limestone U Students' Union on March 31^st. On March 29^th, the "Stumbling Stones" fell ill with the flu, and were unable to travel to Limestone City. Another rock group was contacted by the Stumbling Stones to appear in their place, and arrived at the Students' Union in time to perform. The contract, by its nature, is not subject to vicarious performance.

Carten Printing receives an unexpectedly large order for shipping envelopes from one of its regular clients, a major Canadian CD-ROM retailer. In order to meet the order delivery date, Carten farms out part of the printing to another firm, Serger Printing. Serger, in an attempt to raise its own profit margin on the deal, uses lower grade adhesive and cuts corners on printing quality. The faulty shipping envelopes show up as returns made to the retailer from dissatisfied customers. The retailer takes action against Carten for damages. What is the most likely outcome?

Dev contracts to build a computerized printing press for Tyrone. He subcontracts some of the work on the computerized components to another company, Charlie Co., which wired a vital component negligently. The repairs are very costly for Tyrone. He can sue Dev for the losses caused by Charlie Co.

Luxury Homes Ltd. contracts with Eliza to build her house. The electrical work is completed by Firefly Electric Ltd. under a contract it entered into with Luxury Homes Ltd. The electrician was Wilbur, an employee of Firefly. Eliza moves into the house and three months' later it burns to the ground as a result of faulty wiring. Who can Eliza sue for breach of contract?

The Four Guys Garage advertised automobile repairs by "Licensed Mechanics." Terry, a car owner, took his automobile to the Four Guys Garage for repairs. The garage owner, Todd, examined the car, and indicated that extensive repairs were required. Terry left his car with Todd, and the repairs were carried out by another licensed mechanic, Rod, an employee. Terry paid $150 for the repairs, but on his way home discovered that the repairs had been negligently made, and had ruined the engine. The Four Guys Garage is liable to Terry under the vicarious performance rule for Rod's negligence.